Whole Foods maintains that Mr. Mackey did not break the law because he did not disclose any confidential company information.

But the consequences could be damaging to the company, if not to Mr. Mackey. Securities lawyers say the Federal Trade Commission might use the comments to scuttle Whole Foods’ proposed acquisition of a competitor, Wild Oats, a company Mr. Mackey derided in his posts. Wild Oats may also use the comments as the basis of a lawsuit against Whole Foods.

Let's consult sock puppetry expert Lee Siegel:

In November, New Republic magazine suspended its culture critic Lee Siegel after it determined that he had been energetically defending himself in the discussion forums of his New Republic blog, under the name “sprezzatura” (Italian for “making the difficult look easy”).

In an interview, Mr. Siegel said that it is only human to engage with critics, particularly in a medium like the Web that encourages self-expression. He still defends his actions, saying that he was having fun, playfully praising himself while combating some critics whom he saw as fierce and puerile. He thinks that much of the inflection of his online writing got lost on the computer screen.

Yeah, who knew the free-wheeling world of the web was going to get all straight-laced about fooling around like this?

“As for Mackey boosting his company and putting down his rivals, entrepreneurs will be entrepreneurs, and technology is an amplification of human nature, not a cure for it,” Mr. Siegel said.

It may also be human nature to vent online, especially for people who, like chief executives, face formidable legal and public relations pressures to stay on script. That pressure, repressing people who may be otherwise inclined to speak and fight candidly, may be what forces executives like Mr. Mackey to invent fake identities.

You know, I'm sympathetic to both Siegel and Mackey. Why can't we play on line? Mackey should have to follow the legal rules about disclosing insider information and so forth, and Siegel should respect the policies his employer lays down, but why are we being so repressive about the use of pseudonyms? Using a pseudonym on line is like walking around in public incognito. People don't always have to know who you are. If the new rule is going to be that you must always be identifiable, what a horrible loss of freedom!

UPDATE: Someone purporting to be Lee Siegel participates in the comments, leading to deletion and controversy, which is all explained here.

I can't speak on Mr. Siegel, but I've had experience with SEC actions for disclosure, and Mackey's problem isn't as much that he was speaking under a pseudonym, but that he selectively disclosed information instead of making a broader disclosure about Whole Foods insider information to the press, analyst, etc. On the OTC boards where trading can be small, you would be surprised how much people can make on companies by pumping-and-dumping their stock with an anonymous disclosure of financial or strategy information on their company. Mackey might have only been trying to play some puerile game of defending his company, but he pretty directly broke SEC law, and I've predicting at least 9 mos in prison for him before its all over. Doesn't pay to be both a CEO of a major company, and a bit of nut.

I used to have a fairly hard line on anomynity and blogs - I was against. On the other hand, I've backed down somewhat since then, at least to the point of emphasizing that what really concerns me is incivility, and the theory is that anomynity tends to foster it. As I said in the comment linked above, "the problem of anonymity is tied to the problem of monopoly, in that both are facets of the same jewel: unaccountability. When people don't feel that they will be held to account for their actions, there is immense temptation to slip the restraints of civility and say what's really on one's mind. ... [A]t a minimum, everyone gets angry sometimes, almost everyone has an issue that pushes their buttons, and there are just far fewer restraints holding you back from really lighting someone up if you don't think you're going to be held accountable for it."

The problem with that thesis is that there are plenty of civil bloggers and commenters who are psedononymous, often with good reason (paradigmatically Reader_Iam and MadisonMan as commenters here, or my co-blogger Tully), and there are plenty of eponymous bloggers who are incivil (Amanda Marcotte springs to mind, or significant fractions of the leftosphere generally). In all, I'm still disturbed by what people write anonymously; I find it hard to believe that well-adjusted people would say the kind of things they say anonymously in person - either out of an innate sense of decency, or at least out of fear for retribution. But then again, we look at what the anonymous Anti-Althousiana say in comments here and think "well, no one would say that under their own name." But of course, they do - various eponymous bloggers repeat the same worthless ad hominem, apparently without shame or fear of retribution. The comments section here is often likened to a coffeehouse, and if it were an actual coffeehouse and someone walked in and started speaking to the owner the way DaveTM (for example) speaks to our Hostess, one expects that someone would have the common decency to sock him in the jaw and throw him out the door. I still think, however, that as a general point my concern that anonymity fosters incivility, or at least exacerbates an innate tendency in some people, holds water, even if I have to admit that experience has shown that I may have exaggerated the point.

Still, on the matter at hand, I think there's a distinction between pseudononymously commenting at someone's blog (or writing your own), on the one hand, and sockpuppetry on the other. The problem I have with what Siegel did is that it's not essentially different to what Greenwald does (or did; we make fun of him, of course, but I have no idea if he's still doing that stuff). Of course "it is only human to engage with critics, particularly in a medium like the Web that encourages self-expression." And there's nothing wrong with doing so. But that doesn't lead to the conclusion of sockpupetting. Bloggers can and do engage in the comments. What Siegel did feels wrong.

Invisible, I've yet to see an example of non public info he cited in his pseudo posts. When he selectively cited he did it as a random board poster. That carries no special weight, and should carry no additional burden. If his posts are factual inaccurate, or based on insider information the worm turns. WFMI has never been a BB or PK issue, has been listed since the IPO. Any stock can be manipulated, but Whole Foods is not thin, or low volume. WSJ Lawblog has an interesting discussion in the comments: http://blogs.wsj.com/law/2007/07/16/should-whole-foods-ceo-be-punished/

Well said, Simon. I tend to agree that the anonymous nature of the internet makes it easier for people to be a**holes if they are so inclined. I simply can't belive some of the folks who fling ad hominems around here in comments would do that in a face to face meeting--were they to speak to me like that in person, there would most certainly be an overtly physical response. Yet they do so.

One can only assume that people like that are cowards at heart and revel in the anonymnity that they feel give them license to be immature children.

As to the CEO thing--I will defer to the SEC and market to sort that one out.

There is nothing wrong with a pseudonym. The motive behind the pseudonym is a different story.

I have often felt that if I were a famous person, it would be a blast to haunt fan boards and news boards to discuss 'myself'. On the other hand, you would have to have a pretty thick skin to read things about yourself that can be very negative. It is a double-edged sword.

Using a pseudonym to constantly bash and battle is a mark of cowardice. And I have never had any use for 'flamers'.

Using a pseudonym to safely engage in conversation while protecting your privacy is not a bad thing. Having been a nethead since I first dialed up with a 14.4 kbps modem in 1994, I have always protected my privacy. And as time went on, I became just as protective of my pseudonym. Strange how you protect the reputation of your alter-ego so forcefully even when you are anonymous. I find that fascinating in hindsight, although it was psychologically exhausting at the time. Around 1997 or so, I realized how incredibly silly the whole thing was and stopped completely. Now my alter-ego doesn't exist and I am a happier person for it.

Today there is an entire generation of people who are so incredibly open about themselves online and are finding out that privacy doesn't really exist in cyberspace (Miss New Jersey to name one). It will be an interesting thing to follow in the years ahead.

In this case, I think that Mackey has possibly crossed an ethical boundary...... but that will be for the lawyers and officials to sort out. I do not believe he is the first, nor will he be the last. The internet is going to keep courts busy for years to come.

What Mackey did may or may not have been illegal, but it was pretty clearly sleazy in intent.

As others have pointed out, the issue with Siegel wasn't pseudonymity as such; it was that he was using a pseudonym to pretend to be a fan of himself. Deception matters if it is material to the topic at hand--and since the topic was Lee Siegel, Lee Siegel's identity was pretty clearly material.

But beyond any ethical considerations, Siegel's sockpuppetry was really just pathetic. I mean, how sad and feeble do you have to be to do something like that?

In both of the cases Ann cites the men explicitely used the pretense they were not the specific people they actually were. It's a false pretense. They weren't just using psuedonuyms, failing to reveal who they are. They were explicitely pretending to not be the people they are.

If I post comments on Ann's blog under the name, "whatever" and talk about her haircut that is very different than posting comments on Ann's blog as "whatever" talking about that cool haircut that guy Gary Carson has.

Gary and Tom put into words what i was reaching for. The problem was pretending to be someone else in order to defend your position in comments on your own blog. Questions about pseudonomynity are separate to sock puppetry, the latter usually being deployed for ends that just seem lame.

Doyle claims Greenwald didn't sock-puppet despite plenty of evidence suggesting otherwise. Greenwald implied that his (real or imagined) boyfriend made those psedononymous posts, but has never stated such as fact. Moreover, the style of the puppet comments contains many of Greenwald's stylistic tics. If Doyle has any proof that Greenwald did not sock-puppet, it would solve a lingering mystery on the subject.

Why is it wrong to pretend to be someone you're not? Am I allowed to go to a bar and pretend to be 15 years younger than I am and not a law professor? Is it okay for me to answer "no" (as I did) when someone comes up to me on the mall and asks me if I'm an "artistic and creative person"? Can I publish essays under a male pen name? As long as I'm not defrauding someone or violating some law or policy that I'm bound to, what's wrong with adopting a pose -- for fun or for personal protection or for any number of reasons? We don't owe everyone all the facts about our lives!

Where it becomes a problem is when Ann's students use pseudonyms to engage with her in a very different manner than a student/teacher relationship would allow for.

Capricorn's love games, of course. And, they play them well. Naturally she has no problem with having a little fun online.

I'm guessing, though, the University sees it quite differently. I wouldn't think they are very pleased about the nature of student/teacher banter that goes on here.....provided that the students hide their identity (as encouraged by Ann) through pseudonyms.

And, make no mistake: 85% of commenters on this blog are former, and current, students of Ann's.

But, like she says, it's all perfectly fine with her, as long as they hide their identity.

"Hi Everyone: I'm your Teacher today. By the way, if you'd really like to get down-n-dirty with me, and/or, you need a good smackdown---just come online and be sure not to tell me you're one of my students.

Just a question... if our CEO wrote a position paper that was circulated that said the same thing...someone could call that an "advisory" I think. If he held a conference call with only some in the investment community would that be illegal? I think so. If he gave false statements out in either manner he could be in big trouble.

Why would dissemination through the internet differ? is there legislation?

Ann Althouse said..."Why is it wrong to pretend to be someone you're not? Am I allowed to go to a bar and pretend to be 15 years younger than I am and not a law professor? ... what's wrong with adopting a pose -- for fun or for personal protection or for any number of reasons?"

This is all true, but I'm not sure that's an exact comparison to the kind of sock puppetry at issue here. Would it be okay for you to go to a conference where participants didn't know what Ann Althouse looks like and - wearing a name badge "Jane Smith" or somesuch - discuss how useful her work is in evaluating federalism decisions? And to argue with people who disagreed? Granted, it's not hugely unethical or anything, it just seems a touch unseemly to represent yourself as someone else in order to defend yourself while remaining insulated from criticism. Granted, the line is hazy. I suppose you could qualify my conference example by positing circumstances in which you could legitimately adopt a pose at such a conference and discuss your own work (some people are more forthcoming about their real opinion on something when the author isn't present to potentially take offense). I don't disagree with the points you make, and I don't know quite how to describe what the boundary line is, but I think there is a line, and I suppose I'll have to advert to Justice Stewart's "I know it when I see it" test. ;)

Simon: "Would it be okay for you to go to a conference where participants didn't know what Ann Althouse looks like and - wearing a name badge "Jane Smith" or somesuch - discuss how useful her work is in evaluating federalism decisions? And to argue with people who disagreed?"

Well, what a playwright goes into the lobby at intermission and talks with people about the play without telling people who he is?

Maxine Weiss said..."Where it becomes a problem is when Ann's students use pseudonyms to engage with her in a very different manner than a student/teacher relationship would allow for."

I don't think that's necessarily problematic. It becomes a problem when the manner in which they seek to engage here is abusive, disrespectful or inappropriate (one thinks of "Wade Garrett," for example).

"[M]ake no mistake: 85% of commenters on this blog are former, and current, students of Ann's."

How could you possibly know that? (Says someone who's neither but would like to be.)

Ann - I think that would generally fall in the qualification I mentioned later in the comment. If you're just standing in the lobby asking people how it was, then that seems okay. But on the other hand, if you're in the lobby anonymously and you're telling the theater critic from the NYT how wonderful it was and how the playwright is a genius, then that is quite another matter, surely?

I'm sure there must be a test -- I'm a formalist, I don't like this vague "know it when I see it" stuff! -- I just can't elucidate what it would be (perhaps because the problem itself is amorphous in my mind; sockpuppetry (as opposed to mere psedonomynity) just "feels wrong").

I'm not an expert on insider trading rules, but have worked for enough public companies to have read all the disclosure documents given me. This case is about as easy as it gets; Mackey blatantly and clearly broke the law. Not only will he serve jail time, he and his company will be successfully sued by investors.

(What's making this worse for John Mackey is that he won't shut up. The board of directors should fire his ass, but since he's Chairman of the Board, it's completely compromised. Yet another argument for making it illegal for a CEO, President or any other top executive at, or even employee of, a public company to also be on the board.)

Maybe the way to formulate the problem is this: by commenting anonymously on your own work, and arguing with people who disagree, you are illegitimately appropriating the cloak of the disinterested observer.

Joe, be specific about the point of law Mackey broke and why. Stephen Bainbridge, an expert on corporate law and securities links to my post and says only "Ann Althouse offers some very fine commentary on this issue."

Simon, I just think it's more complicated. You could talk about yourself in a way that might be a humorous prank or that might be asking questions designed to move the person toward thinking about an issue more carefully (by, for example, saying that something is intended to be satirical or an allusion to something).

All of my emails through the company email box are intercepted and archived. I am also not allowed to use instant messaging on my work computer (which I bought myself as I am an independent advisor)

The NASD and SEC are proposing even more draconian measures to make sure that licensed advisors are not emailing, instant messaging or otherwise connecting with clients. To that end they are proposing that my broker/dealer should be monitoring my internet usage at home, from my Blackberry and any other source.

This is going a bit too far, IMHO. My husband is a user of our home computers. Are they planning to monitor all of HIS communications because we share a household?

The ability to be anonymous is the ONLY way I can communicate on the internet and even then, I have to be very careful not to discuss anything that would approach investments.

Ann - Well, I agree with that. I agree that there are certainly circumstances in which it's fine, including most of the hypotheticals you mention -- but surely you'd agree that there is a point at which it at least starts to become a gray area, even if we can't say for sure where the line is or whether Siegel crossed it in this case. (If you don't agree with that, where does the complexity you allude to come into the picture?) As with my comment above about anonymity, the problem isn't so much the fact of it as some of the uses to which it's put.

"Insider trading" refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped" and securities trading by those who misappropriate such information. Examples of insider trading cases that have been brought by the Commission are cases against: corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments; friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information; employees of law, banking, brokerage and printing firms who were given such information in order to provide services to the corporation whose securities they traded; government employees who learned of such information because of their employment by the government; and other persons who misappropriated, and took advantage of, confidential information from their employers. "

By trying to drive down the price of the stock in a company that was in the process of being aquired or merged, Mr. Mackey seems to have violated the insider rules.

Whether he is subject to the internet electronic rules as I am.....I don't know.

I always have used my own name. Apparently I don't feel the acute loss of freedom that using your own voice in your own name is supposed to provide.

I think the uniquely American idea of freedom, though, involves being able to ``move out west or something'' and start over, without being tied to your former screwups. That's hard to do now, I'd guess, with various federal tracking systems and requirements ; but it's at the heart of the objection to a national identity card, that it kills off the idea of going somewhere and starting over.

But that's something you'd because you do speak in your own name, and so now need to make a break, and start speaking a new own name, leaving the old forever. If you flip around at random, it's hard to know what you're posting about : I want to say, this is what I think it's like, in my own name, not somebody else's.

Being tied to what you said is a blessing. It's what makes you free.

Edmond Jabes on freedom . It is not the bird, but the flower, that is free.

I'm sure there must be a test -- I'm a formalist, I don't like this vague "know it when I see it" stuff! -- I just can't elucidate what it would be (perhaps because the problem itself is amorphous in my mind; sockpuppetry (as opposed to mere psedonomynity) just "feels wrong").

I think 'materiality' captures the essential distinction. Say you're arguing with some people about the war in Iraq. Say you're a male who posts under a female pseudonym. This isn't unethical as such; it all depends on the context: the deception would be immaterial in a discussion of the Iraq war (say), but material if the topic is feminism (I think we've all seen anti-feminist sock puppetry). If the validity of your opinion is based wholly or partially on your identity, then deception about your identity is material.

Sorry for the incoherence there--I left an extra sentence in that I thought I had deleted.

I'll just add that while some (Ann, for example) might say there's no harm to misrepresenting yourself even when it's material to the topic at hand, I disagree; to the extent that people value the (relatively) honest exchange of opinions, deception about matters material to the discussion reduce the value of the thing. (Deception in pursuit of gain causes more obvious damage, of course.)

"By trying to drive down the price of the stock in a company that was in the process of being aquired or merged."Dust Bunny, when did he do that? He was talking down a minor competitor for years. Was he bashing while they were in deal talks? Not clear thus far. Did he lie about OATS in any of his comments? Look, he is a clown. Many founders need to be shown the door. The very nature that drove them to success is a liablity in a publicly traded CEO. He has to be dismissed, for lack of judgement amoung other reasons. His email cited by regulators regarding the merger was troubling in itself. Any CEO capable of such foolishness in a post Blodgett world has to be show the door by the Board. But there's no evidence of any crimes thus far.

Ann asks Well, what (about) a playwright goes into the lobby at intermission and talks with people about the play without telling people who he is?

Nothing at all.

Some of us see a difference between that and a playwright who goes to the lobby during intermission and explicitly pretends to not be who he is (different from just not saying) while trying to convice everyone the play they are watching is just wonderful.

Maybe you don't see that distinction. If you don't then that's fine, it just means you have a very different ethical and moral compass than some other people have.

None of the examples you ask about in this thread fall under the umbrella of sock puppets. It's not deception that's the problem, it's the particular deception of a sock puppet that's the problem.

Personally I think the use of sock puppets is a strong indicator of serious mental illness. But that's just me.

He was saying negative things about the company that his company was intending to buy and who was his competition. In internet chat rooms about stocks when this type of information comes out it can cause people to short the stock and profit from a decline when other people sell off their positions. The opposite of pump and dump which he might also have been doing. Posting good news about his own company to increase the price of stock by creating a buying demand.

Individual private investors are free to do what they like and make as many deceptive posts as they want. As an insider Mr Mackey's stock manipulation is unethical at the least and most likely illegal. If I were to do such a thing I would lose my licenses at the very least.

Simon- Take the example of the playwright- If he is incognito in the lobby to listen to the comments of others and learn what they liked and disliked, and why, through a few questions; that would be investigation and not an issue.

If he is posing as a disinterested individual and touting the play to a critic, he stands to gain from the episode through his deception.

Some could argue that he is gaining though his anonymous learning, but the gain is personal, not financial.

The same with your scenerio featuring our august hostess; if she is anonymously touting her work, then we have financial gain and a posing situation; if it is to accumulate people's thoughts on a particular work in order to improve it, then although there is a gain, it is not directly financial.

I agree that the Stewart definition, although adequate, isn't finite; introducing financial gain as the break point seems to add that finite point for me.

I've used lots of pseudonyms over the years, rather carelessly. The online world encourages that, really. And I've been guarded about revealing personal details in order to keep discussions from degenerating into personal attacks. (And this was fascinating for a while as one could observe the assumptions made about one's political philosophy, religious beliefs and even race and sex. On the Internet, truly, no one knows you're a dog.)

Sock puppetry is not the same thing. The intent is to deceive and bolster an argument or (in Greenwald's case) a person by pretending to be someone with an independent viewpoint.

"Unseemly" is the right word or "tacky" when an individual does it. It can also be more sinister. In the early '90s, Microsoft commissioned an army of sock puppets designed to discredit OS/2. They were caught in more than one instance but it was only long after OS/2 had ceased to be a threat that their employees admitted it (proudly!). And MS suffered not at all for this particular activity.

But I don't see that there's any cure other than people learning to be careful about whom they trust, whether anonymous internet voice or large newspaper.

That's only proof against false information, though. They odd thing about this to me is that if he's just some loud-mouth internet guy as far as anyone knows, did he really disclose something? Some people have an uncanny ability to guess what's going on. Without the identity attached, how do you tell the insider from the paranoid schizophrenic?

There's nothing wrong with pseudonyms per se. But doing so to stroke one's own ego, or to make an argument from authority where you are actually citing yourself as the authority, is funny and worthy of mockery in most cases.

Anne, as I said I am not an expert in security law. Dust Bunny Queen gave a good synopsis of the problems. In my case, I know what I have to sign when I work for a public company (which, I must point out, you do not.) I explicitly agree to NOT do what Mackey did. Beyond the insider information he was leaking, he was clearly engaged in stock price manipulation for a company his company intended to purchase. This is outright fraud.

Pseudonyms are fine in my book, but I prefer that people stick with them. I like to know that Simon is Simon, hdhouse is hdh, and so on and so forth. It is not that I know who they are in real life, but it means more to me when I disagree with Simon or agree with hdhouse. Well, it is more interesting. And I have friendly thoughts of those guys and lots of others, they are friends I have never met.

Sock puppetry on the other hand (heh heh) is fraud. Now it is not fraud in that it is illegal per se, but it is fraudulent to the blog community. In the same way, trolling is harassment of the blogging community. The first is meant to mislead and defraud, the second is meant to disrupt and stifle free expression.

I had a nice email conversation with someone who had been trolling and harassing me specifically over at Dr. Helen's, and they actually appologized and stopped. I am hopeful that the person, who was quite reasonable in the emails, will not do that sort of thing again. But most of the time trolling and puppetry is an attack against a blog community.

I hope that for the real Lee Siegel's sake that the above commenter is a fake "Lee Siegel" (would that be an reverse sock-puppet? An ordinary joe masquerading as a known name rather than a known name masquerading as an ordinary joe).

If not, yikes!

I might go so far as to accuse the 'lee siegel' in this comment section of blogofascism.

(this guy is employable as a 'cultural critic'?)

As far as a CEO doing this, the SEC has certain ideas about what constitutes fraud, and sock puppetry of a certain kind may meet their standards (nobody's said that Mackey's comments are a clear violation, but they're close enough to merit investigation).

Curiously, using his real name did not keep Siegel from accusing other public figures of pedophilia on much less evidence than the claim about himself ("Siegel wanted to fuck a child" is not precisely accurate, but the less radical interpretation of the text--"Siegel expressed regret at not having wanted to fuck a child"--isn't all that much better). This was certainly his most egregiously cowardly and mendacious attack, but it wasn't the only such attack he made.

Siegel's real problem--the thing that drove him over the edge into sockpuppet looneyville--is that he did not have absolute control over the discussion. Naturally, he projected his own quasi-fascist impulses onto his critics ('blogofascists'); that's what contemptible worms like Mr. Siegel do.

Dust Bunny, did he say anything false about OATS? Bashing the competition in 2002 and taking them out in 2007 is perfectly legal and common. Plenty of evidence he is unfit to lead a public company, none as yet of a crime. Zero evidence of manipulation thus far. Stating facts about a company, and why you think they bode well/poorly, is not manipulation. Besides talking about his hair that's all I have seen him do. Mind you I am not about to read all 1400 posts of madness. In my opinion this guy has nothing on Paddy Byrne; no mafia, no Sith Lord, no anti DTC rage. If you are looking for stock manipulation beyond the PK/BB world I would dig into some of those foreign based media M&A "reports." If an overseas employee of a Cayman based Corp pays/plants a story in the foreign press is it a crime that can be detected and prosecuted? Anyway, this guy is a laughing stock, the board has a duty to act. But moving a Founder out is always a challenge. JBLU's CEO/Founder overstayed his welcome as well, to all but the Short's detriment.

"Beyond the insider information he was leaking, he was clearly engaged in stock price manipulation for a company his company intended to purchase. This is outright fraud."Jumping the gun, Joe. What was the insider info leaked? Clearly involved in stock manipulation? He might coming looking for you via defamation. Did he state falsehoods or spread misinformation re OATS? During what time period?

Hiding your identity to pursue freer discussions/evidence gathering is fine. The playwrite lurking in the lobby, the king inspecting his realm, etc. Hiding your identity to directly promote your endeavours/interests by appearing to offer unbiased commentary is unethical and frequently criminal - it is fraudulent.

Mackey's in extra trouble because of his criticism of Wild Oats presages his attempt to purchase Wild Oats. Now it likely was just simple trash talking at the time, but in retrospect it looks like especially malicious and malevolent market manipulation.

If you have a personal stake in a discussion, you need to be transparent about your identity. CEOs face many restrictions for the good of their companies. Using a pseudonym to argue politics is one thing - the CEO of a retailer has to suck up to lots of pols and almost assuredly needs to vent, but some stupid name like "Hey" is unlikely to sway an appreciable number of people. Going onto stock boards that have large effects on prices, especially in after hours trading, is somethign that no CEO would ever do in his official capacity, and is deeply troubling using a pseudonym thanks to the closeness to his official corporate interests.

“Gary and Tom put into words what i was reaching for. The problem was pretending to be someone else in order to defend your position in comments on your own blog. Questions about pseudonomynity are separate to sock puppetry, the latter usually being deployed for ends that just seem lame.”

I would agree, except that I would add TMink’s corollary that all bloggers should keep their nom de blogue constant so that:

“It is not that I know who they are in real life, but it means more to me when I disagree with Simon or agree with hdhouse. Well, it is more interesting. And I have friendly thoughts of those guys and lots of others, they are friends I have never met.”

But Prof A has asked:

“Why is it wrong to pretend to be someone you're not? Am I allowed to go to a bar and pretend to be 15 years younger than I am [LOL, F.I.] and not a law professor? Is it okay for me to answer "no" (as I did) when someone comes up to me on the mall and asks me if I'm an "artistic and creative person"? Can I publish essays under a male pen name? As long as I'm not defrauding someone or violating some law or policy that I'm bound to, what's wrong with adopting a pose -- for fun or for personal protection or for any number of reasons? We don't owe everyone all the facts about our lives!”

I think that Simon has answered Prof A. in advance.

Go back to a lower tech era. No one would’ve thought that a NYT critic’s glowing review of his own pseudonymous book was Kosher.

And no 40 year old guy would think himself lucky when he answered a “personal” ad from a 55 year old woman alleging that she was 40.

And everyone is amused or appalled by Safire’s story about going into the Oval Office & asking Pres Nixon why he wasn’t approaching problem A with ridiculous solution X, e.g., “why not quadruple farm subsidies”, so that Nixon could say in his farm speech “Some say that I should quadruple farm subsidies. Now I want to help all farmers, but I owe it to the American people to be reasonable….”

So Prof A, while it is true that

“We don't owe everyone all the facts about our lives!”,

some of us feel an obligation not to misrepresent our credentials. Actually, I think that we can assume that most people giving anonymous legal advice (or economic advice or climate advice) here, “this is definitely a violation of ‘Inside trading’ law, rules, or regs’ ”, are not securities lawyers (economists, climatologists). They may even be dogs as the WSJ reminds us today. So why read blogs? Maybe because they’re like a town meeting where non-experts can present common sense suggestions about a problem which has become politicized.

For instance, I think that Dust Bunny’s legal analysis (I’d guess he's not a securities lawyer) is too exuberant, but I could be wrong & I admit that it’s not beyond being adopted by the SEC. Nevertheless, he has raised the issue of employer rules which Professor Bainbridge, for instance, did not. And he has raised the issue of “a law for the lion”. And he has articulated the position of many informed corporate types who think that this is sinister as well as silly.

And maybe because none of the media, MSM or Fox, seem to present unpoliticized “experts”.

And maybe because when many an important legal issue comes up it’s already been politicized (e.g., law profs, including “looneycat F**kwad” , signing a nonsensical petition that Gore had “been elected by a clear constitutional majority of the popular vote”, whereas the popular vote has no constitutional significance in Presidential elections) or such issue’s been decided based on a SCOTUS justice’s feelings (e.g.¸ Justice O’Connor’s fiat that Affirmative Action should hang in there for another 25 years).

And maybe because the MSM always describes dissident backbencher Republicans as “Key” Republicans or “Leading” Republicans. And maybe because the Media presents science based on consensus & “lies with statistics”.

Finally, please do not think that I am defending Mr. Mackey. Based on his embarrassing admissions, he has acted un-businesslike here & embarrassed his company as well. I wonder if I were a Whole Foods’ stockholder, as opposed to a Whole Foods’ overly-devoted customer, I’d be happy with him in charge.

Yeah, I was going to say AL, you're a much better writer than Greenwald. I mean, you're usually a jerk, but you're blessedly succinct.

I'll always fondly remember Siegel being the winner of one of Andrew Sullivan's Poseur Alerts. I mean, it takes one to know one, eh Sully? Of course, Siegel may have been readable at one time. Sullivan used to be.

Simon: The only people Althouse has ever banned on this blog are former or current students ...

...who failed to use a sufficient pseudonym.

Althouse's "Don't Ask Don't Tell" policy regarding students engaging with her ---require all current and former students to lie about who they are, lest the banter turn inappropriate (which it always does) in terms of a correct student/teacher relationship.

I guess my question would be: why is the onus put on the students to hide their identities? Maybe Althouse should be the one forced to adopt a pseudonym, and let the students be who they are?

A Law Professor starts a law blog, but then tells her students she won't engage with them if she knows they are her students.

Maxine: My students are welcome to comment if they either behave well or withhold the information that they are students (or former students). What I object to is someone who wants to have his cake and eat it too. That is someone who wants to abuse me and put in a position where I feel compelled to be a mentor. One or the other... or leave.

I don't accept people posting under someone else's name here. I deleted the post that purported to be Lee Siegel because it's inconceivable to me that Lee Siegel could be dumb enough to write: "Ann Althouse astonishingly writes that she "condemns" me because "the truth is I never liked Lee Siegel," so I guess nothing I say will penetrate her bias."

Obviously, the post and another comment defends Lee Siegel and I only said I was "tempted" to condemn "the practice" of sock puppetry -- not Siegel himself because I don't like him. (I don't like his writing. Find my old posts criticizing his writing if you like.) I'm defending him in spite of the fact that I don't like his writing. Get it? The opposite of bias. Jeez.

If that actually was Lee Siegel, he can email me and convince me it was him, and then I'll restore the post, which I still have.

IIRC, he is quoted as having written something to the effect that "I wouldn't pay $5 a share for that company" not long before offering to buy it for $18. Not sure you would qualify it as false but, depending on the time frame actually involved between his post and the offer, he may have much to answer for before a judge or jury.

Ann: I overlooked your earlier reply. Yes, that was Bainbridge post I was referencing. (FWIW, I did realize those were questions Bainbridge was asking, and not an analysis of any case. That's why I wrote "mentioned various possible legal problems." I apologize for the apparent lack of clarity.)

AlphaLiberal: I find the accusations false... I followed the pages accusing Greenwald of same and found the "evidence" to be completely lacking and convincing only to someone with an ax to grind against Greenwald

IP addys don't lie Alpha. The only other explanation was that Glenn Greewald let three other people post in his defence from his own computer.

I agree with TMink's comment, but I'd add that even though I only go by my first name here, I'm hardly anonymous. It's just that the "Simon said..." byline is a useful (if lame) thing to have, y'know. ;)

Palladian said..."Yeah, I was going to say AL, you're a much better writer than Greenwald. I mean, you're usually a jerk, but you're blessedly succinct."

One of my favorite Scalia one-liners -- I mean, really one of the best he's ever slipped into a majority opinion -- is from College Savings Bank, that Justice Breyer's dissent "reiterates (but only in outline form, thankfully) the now-fashionable revisionist accounts of the Eleventh Amendment set forth in other opinions in a degree of repetitive detail that has despoiled our northern woods."

Maxine Weiss said..."Simon: The only people Althouse has ever banned on this blog are former or current students who failed to use a sufficient pseudonym."

Of the two people banned that I can recall, the problem wasn't that the person's pseudonym was less than airtight. It was that they were an ass.

"I guess my question would be: why is the onus put on the students to hide their identities? Maybe Althouse should be the one forced to adopt a pseudonym, and let the students be who they are?"

Because they are - as we are - the guests, and if we want to come in and play, we've got to abide by the rules? This is basic stuff, Maxine.

"A Law Professor starts a law blog, but then tells her students she won't engage with them if she knows they are her students. That makes sense?"

That isn't the policy, you know what the policy is (if you didn't before, Ann reiterated it above), the actual policy makes perfect sense, and you know it.

Internet Ronin, 24+ months passed between that comment and deal talks. His mouth has likely killed the merger and his position at WFMI, but that comment will not get him dragged into court. As Don Ameche can attest, things change. Also, as a random net board poster what was his impact? These postings are not valued by anyone in the investment community. For those who've never waded in, imagine random flame wars between hyper enraged left and right activists. The financial edition of Truthers Vs Bill/Hill slit Vince Foster's throat or some such.

The SEC specifically prohibits company executives from disclosing information about their company to select audiences. In addition Sarbanes-Oxley requires disclosures be known and approved by the board of directors. This is true even if the disclosures contain no misstatements or omissions. In addition, any forward looking statements are almost always accompanied by a disclaimer so nobody misinterpret the nature of these projections.

If Mackey engaged in any stock transaction with Whole Foods while making these disclosures, he is by definition guilty of insider trading. (Anyone here actually remember all of what Enron and Worldcom was about? Apparently not.)

Making any statements anonymously very likely increases the culpability of Mackey and adds fraud charges.

Mackey also engaged in a campaign to anonymously discredit a competitor and drive it's stock price down. Several people have gone to jail for doing precisely this, some were just normal people, not encumbered by the rules governing company executives.

The failure of the board of directors of Whole Foods to act and fire Mackey as soon as his misdeeds were know also makes them liable to both lawsuits and SEC violations, especially if the OATS purchase fails, which it likely will.

Sarbanes-Oxley is widely regarded as being onerous, but it didn't arrive in a vacuum. It was a response to many of the same abuses outlined here by, among others, Enron and WorldCom (especially the board of directors indulging a CEO who was acting irresponsibly.)

I need to repeat one thing so everyone understands; Mackey did not have to lie to engage in fraud and break the law. Everything he said could be the absolute truth. What matters is HOW he disclosed information, not necessarily what information he disclosed. (Had a low level employee of Whole Foods done what Mackey did and been caught, they would be fired and likely charged with a crime. And yes, it has happened many times.)

The only other explanation was that Glenn Greewald let three other people post in his defence from his own computer.

We know for a fact that the posts in question were posted from Greenwald's personal computer. He attempted to suggest it was his boyfriend who made the posts. But Ace of Spades found that some of the content of the posts in question appeared in Greenwald's own blog posts after they appeared in the comments in question.

So, to believe Greenwald wasn't using sock puppets all over the internet in pathetic fashion you have to be someone who just doesn't wanna look at the evidence.

"I need to repeat one thing so everyone understands; Mackey did not have to lie to engage in fraud and break the law. Everything he said could be the absolute truth. What matters is HOW he disclosed information, not necessarily what information he disclosed. (Had a low level employee of Whole Foods done what Mackey did and been caught, they would be fired and likely charged with a crime. And yes, it has happened many times.)"

Actually, the first point is very much a grey area. Your second, regarding a low level employee is correct. You are well out of your depth. No point in carrying this further, let's agree to disagree and let the investigation play out.

Are you kidding? Regardless of Mackey's guilt, the first point is crystal clear. Violating disclosure rules doesn't require that a person lie. If you don't understand this, you understand nothing about securities laws.

Furthermore, to agree that a low level employee would have more legal problems than an executive only further establishes your ignorance. What do you think Sarbanes-Oxley was all about? (Many public companies extend the restrictions of executives to all employees to prevent any possible violations, though this is not required by the SEC or federal law.)

(One final point; Mackey did violate Whole Foods policy--this is another reason why the failure of the board of directors opens them to liability and likely personal liability--yes I said personal, members of boards are now being held personally liable; this is a matter of public record.)

So stop lecturing us dolts as if we were unaware of Enron. (How about Samuel Insull or the Tulip Mania?) Or unaware of Preventative Law Procedures in place at companies like yours.

This is a case of first impression so far as I’m aware. And again, none of us has read all the e-mails, nor the employee regs, if any, which Whole Foods has adopted & promulgated to its employees, so we are commenting on general laws, rules, & regs & assumed facts, which is what the Blogdom does best, though I suggest that, perhaps to put it a little less harshly than #56, your analysis is not that of a securities lawyer though you seem to be working from the preventative product of your company’s securities lawyer(s).

And I’m not offering legal advice to you or anyone.

You say:

“(Had a low level employee of Whole Foods done what Mackey did and been caught, they would be fired and likely charged with a crime. And yes, it has happened many times.)”

With all due respect, it’s news to me that many low-level employees have done something as thorough & as planned as this, 1,100 e-mails, according to one report. And then been charged with a crime. Isn’t it more likely, that any employee wasting his/her time on a company chat board would fit the profile of some ingenuous guy thinking that he/she could make the difference by jumping in to protect his/her company from what he/she thought a scurrilous charge, rather than manipulating the market? I gave up on employee chat rooms long before the turn of the century because I had the same experience as #56: food fights or ill-informed opinions & guess work, of no interest to any investor of sound mind, savvy or casual. For instance: earnings will rebound next quarter as a result of the widget wizard; the widget wizard will not work & the Company will go belly up as a result of investing a gazillion dollars in its development, & the ever favorite proxy time one, the Top Brass make too much & that dough could be better spread around us mere mortals.

And Mackey seems sui generis, although all entrepreneurs fit that description. If any CEO was talking to his son/daughter, a first year lawschool grad who didn’t work in, or know anybody who worked in, the securities law area, & said “I’m gonna go on the ‘Net as “Rehobeth”, you know the place where the Cape May Ferry goes to Delaware, & say all kinds of nice things about my company & some un-nice things about its competitors, some of them true enough tho maybe not the whole truth, & nobody knows my name, then I hope that even this youngun’s would instinctively tell him (Preventative Law) of “What Could Possibly Go Wrong” with such nonsense, somewhat along the lines of your quick summary, though with a big warning to consult a securities lawyer.

And at the time SEC Reg. FD came out, law firms were falling over themselves to give their clients warnings about the ‘Net not being so “different & informal” that securities laws, rules & regs wouldn’t reach it. And employers such as yours were prudently warning their employees to stay off the ‘Net re the Company unless authorized.

But Mackey was apparently above all that, if, indeed, all that existed at WF.

And Mackey’s lawyers now, if some prosecutor goes after him, will probably use the defenses suggested by #56 at 8:26 last nite & in yesterday’s WSJ editorial. In that regard, I have several non-lawyer gambler friends, who insist that Pete Rose should not be banned from the Baseball Hall of Fame, because no gambler in his right mind (a big assumption!) would follow Rose’s bets since no one thought much of Rose’s brain power. QED for my friends, Rose’s not betting on his team was not “Inside Info” & there was “no harm, no foul” & he should be in the Hall. Baseball’s powers-that-be don’t agree. They feel that not betting on one’s team on Saturday after you’ve bet from Sun-Fri is a tip to a selective number of gamblers you gamble with that you don’t think your team will win on Sat & it is “foul & harm” to the rest of the gambling world which isn’t in the know. I tell my non-lawyer gambling friends that this decision is analogous to Insider Trading in stocks & they become analogy impaired. Prediction: Rose won’t make the Hall of Fame ‘til he & all his contemporaries are long gone. Or maybe he’ll get a disease & sentiment will kick in.

So absent a disease for Mackey, where do we go from your, with all due respect, Securities Law 101 final law school exam problem spotting? And BTW, why the attacks on #56? OK, he has no patience, but I don’t see that he disagrees with your comments as Preventative Law, repeat Preventative Law, just that they’re only the beginning for a Mackey analysis “after the fall”. A lawyer friend who handled this area for a major corporation used to say to people who thought his work unexciting that his “job was to prevent exciting things from happening”.

How about: it’s political. Yes Mackey did a bad thing, but unless one of the young guns on the SEC Staff finds something more than what we have seen so far, that is what seemed to the public just another one of us anonymous Internet Pontificators, in this case on the déclassé company chat board, it’s not yet Enron for the law school class of ’05 working in the SEC or some prosecutor from the law school class of ‘75.

But, let me hedge. Perhaps in the Post-Enron era, to avoid seeming like they are falling into the “law for the lion” trap, prosecutors will file charges against Mackey. And perhaps to avoid such charges, Mackey’s attorney will advise him to accept a consent order known to lawyers as the cynical “I didn’t do it & I won’t do it again plea.” The sticky points, however, may be that (1) the prosecutor wants jail time or (2) the prosecutor wants Mackey to agree never to serve on the Board of a publicly-traded corporation again.

Unlike you, I just don’t know how this is gonna end & I suggest that we follow #56’s sage advice & “let the investigation play out”.

Re whether Mackey is a “lion”, there may be some sympathy for him since he tries, or pretends to try to lessen his carbon footprint unlike Ken Lay & other assorted miscreants you may hold up in your Hall of Shame. I just wish he or his minions wouldn’t pontificate so much, act like nannies about, what I should & shouldn’t eat. And $6.99 for an heirloom tomato! He's a capitalist. I feel guilty buying 'em. What do the simple folk do?

I don't understand what you are doing here, and I was wondering if you can explain.

You have your own blog, but instead of using that as an opportunity to have the blog you want, you seem to hang out here and criticize the way Ann Althouse runs hers because it's not the way you think it ought to be done. Does that make sense to you?

The last couple of times I've read your comments, you don't even directly comment on the matter at hand (which I'm guilty of here), but instead you use the topic to pick at the decisions that Ann Althouse makes running her blog.

What gives? Why do you do this? Should I simply regard you as pathetic attention seeker or is there something that I don't know that would make clear to me a more valid reason that you do what you do?

I want to see an nice back and forth in the comment threads, not a bunch of strict agreement with Ann's take, but the frequent commenters who just make blogger related snips really baffle me.

It may develop in this case that some others actually were told or found out through Mackey's gross negligence that Mackey was the guy writing under this pseudonym, in which case, like in Rose's, while he was still anonymous to most of the world, a select audience was actually given non-public info by Mackey, which they knew to be from him & not from some anonymous know-nothing, some of which info may not have been the whole truth.

If the deal does go through Whole Foods will be in the clear, and Mackey will likely keep his job. Looks like much ado about nothing from a regulatory perspective. Still, incredibly foolish in my opinion.